5th UNIT OF HRAZDAN TPP SOLD TO GASPROM

Noyan Tapan
Apr 06 2006

YEREVAn, APRIL 6, NOYAN TAPAN. Under the Armenian government’s decision
of April 6, 2006, the 5th power unit of the Hrazdan Thermal Power Plant
(TPP) has been sold to Gasprom company (Russia) for 248.8 mln USD. RA
Minister of Energy Armen Movsisian told reporters on the same day that
the government took this step in order to mitigate the consequences
of the increase in the gas tariff. A. Movsisian said that in the
period from April 10, 2006 to December 31, 2008, the government
will compensate the users 188 mln dollars of the indicated sum in
the form of subsidies aimed at mitigating the tariff increase, while
the remaining sum will be transferred to the state budget. Starting
April 10, the state will subsidize 25 thousand drams out of the 90
thousand drams (200 USD) for 1,000 cubic meters for private users,
and 52.01 USD is envisaged against 146.51 USD for big consumers. The
sum will be transferred to the extrabudget account of the RA Ministry
of Defence, which, according to A. Movsisian, will allow to accelerate
the process. The Russian side intends to implement a 150-160 mln dollar
investment program at the 5th unit of Hrazdan TPP within the next two
years. Under the program, the power unit must be fully constructed,
in addition, a gas turbine with the capacity of at least 140 megawatt
has to be installed. The contract also stipulates that there will be
no change in the tariff of the gas supplied by Gasprom until 2009. The
minister said that this deal will also allow to avoid an increase in
the price of electricity. Asked if it would not be more expedient
to sell the 5th unit by holding a tender, A. Movsisian said that a
tender was announced two years ago but the offered price was much lower
than the current one. According to an agreement reached previously,
construction of the Hrazdan TPP 5th power unit was to be completed
with credit resources of the Iranian side. A. Movsisian said that it
was proposed that instead, the Iranian side should make investmenmts
in the construction of the Meghri hydropower plant on the Arax River.

From: Emil Lazarian | Ararat NewsPress